Life During Structural Transformation

This study uses a model to survey data for Malawi

From:
Foreign, Commonwealth & Development Office
Published
1 December 2014
Country:
Malawi
Document Type:
Briefing
Theme:
Economic Growth, Social Change
Authors:
Temple, J, Ying, H

Abstract

The authors examine whether structural transformation leads to a Kuznets curve. They present a dynamic general equilibrium model with heterogeneous workers, occupational self-selection and selective migration, and calibrate the model to survey data for Malawi. They show that structural transformation raises living standards unevenly. As development proceeds,the movement of workers from agriculture is associated with rising wage inequality, rather than a Kuznets curve. The increase in sectoral wage inequality is pronounced for agriculture. At the same time, structural transformation is associated with major reductions in rural poverty, and eventually in urban poverty.

This work is part of the ‘Structural Change and Productivity Growth in Africa’ project

Citation

Temple, Jonathan, Ying, Huikang, 2014. Life During Structural Transformation. University of Bristol, Department of Economics Discussion Paper 14 / 650

Life During Structural Transformation (PDF, 530KB)

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Published 1 December 2014
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